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Following energy issues in the state of Connecticut and beyond.

Tuesday, March 3, 2015

Reuters Story Mentions ISO-NE In Natural Gas Price Story

Another day, another view on regional grid operator ISO-New England.

I wrote a story Friday in which Pulitzer Prize winning author David Cay Johnston criticized ISO-NE for its handling of one of the auctions that it oversees to procure electricity three years in advance of when its needed. 

Now in this Reuters article that appears in the Bangor Daily News, ISO-NE is given credit for having offered incentives to power plant operators to lock in oil and gas supplies early. Among the incentives offered is an end-of-season cash payout to cover any excess costs from unused fuel supplies.

The supply of natural gas is important to for generation of electricity in the region because a majority of New England's power plants run on the fuel. And last winter, as the Reuters article points out, the price of natural gas spiked to record levels and forced some electric power generators not to run due to a lack of fuel.

The Reuters article also makes the case that despite the fact this winter has been the coldest in 81 years, natural gas prices haven't spiked as they did last year. Whether ISO-NE's actions are the primary reason the region didn't see a repeat of last winter's natural gas prices is debatable, but it's only fair to give the grid operator some credit.

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